Modern corporate retail brings with them new set of middlemen


Nagpur: One of the arguments to justify opening of domestic retail sector for Foreign Direct Investment in India and Corporate retail, one of the pressing and major justification which was publicize at large, was that they will remove the middleman and will be in a position to sell goods cheap to consumer. As they will procure from producer and sold directly to consumers. The phrase used was From Farm to Folk.

In order to convince ourselves, it is necessary to understand that what was claimed by government to permit FDI in Multi Brand Retail in India then is it really true in real sense now.

The large Indian corporate or the foreign retail giants have number of investors behind them. These investors are prepared to bear losses for few years. In fact they fund the losses.

Then these large corporates and foreign retail giants have advisory of international level, who charges heavily for each and every small or big advice taken from them.

Then these corporates have top level highly paid managerial staff. They have aggregators, procured, collector, grader sampler, analyzer etc.  They also have lot of service providers like their packers, their logistic partners etc.  They work through Software Company. The soft wares are very costly.

These corporate giants go for branding and marketing through advertisements. They take services of highly paid popular persons to advertise for them.  All these are very costly affair. It's not cheap. The administrative expenses of these corporates are also very heavy.

Are all these persons not middleman? Are the expenses on all these people not loaded on the products which consumer is going to buy? How government can justify that the expenses from procurement to consumer are reasonable. Are consumers not made to ultimately bear these expenses? It is impossible.

In contrast to these expenses our traditional traders have very little overheads. Most of the works are done by owners themselves.  They don't engage highly paid management experts. Major of the work is done by owners or their family members themselves or with their own contacts with minimum of expense. Consumers have to bear minimum of over heads.

These corporate retailers or foreign multi-national retail giants may damage the fabric of our retail economy in our country. The options of employment in our country are minimum. Majority of our people are self-employed. They are meeting their both ends by doing small or big work in the Marketplace. These Giants, it appears, may in long run, Crush the existence of our traditional markets, traditional trade and traders. 

We have to think weather to stick ourselves to Swadeshi model or get away buy attractive offers and convincing advertisements to attract our youth for their products. Friends there may be number of arguments to support purchasing from these multinational but we have to see our country first.

Our country men's interest first. We have to rise above self-interest and start purchasing from Swadeshi. From traditional markets. From traditional traders. To help the existence of our economy.


- B C BHARTIA, National President of Confederation of All India Traders, New Delhi


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